U.N. could tax U.S.-based Web sites, leaked docs show

08 июня 2012

The United Nations is considering a new Internet tax targeting the largest
Web content providers, including Google, Facebook, Apple, and Netflix, that
could cripple their ability to reach users in developing nations.

The European proposal, offered for debate at a December meeting of a U.N.
agency called the International Telecommunication Union, would amend an
existing telecommunications treaty by imposing heavy costs on popular Web sites
and their network providers for the privilege of serving non-U.S. users,
according to newly leaked documents.

The documents punctuate warnings that the Obama administration and
Republican members of Congress raised last week
about how secret negotiations at the ITU over an international communications
treaty could result in a radical re-engineering of the Internet ecosystem and
allow governments to monitor or restrict their citizens' online activities.

"It's extremely worrisome," Sally Shipman Wentworth, senior
manager for public policy at the Internet Society,
says about the proposed Internet taxes. "It could create an enormous
amount of legal uncertainty and commercial uncertainty."

The leaked proposal was drafted by the European
Telecommunications Network Operators Association, or ETNO, a
Brussels-based lobby group representing companies in 35 nations that wants the
ITU to mandate these fees.

While this is the first time this proposal been advanced, European network
providers and phone companies have been bitterly complaining about U.S.
content-providing companies for some time. France Telecom, Telecom Italia, and
Vodafone Group, want to "require content providers like Apple and Google
to pay fees linked to usage," Bloomberg reported last December.

ETNO refers to it as the "principle of sending party network
pays" -- an idea borrowed from the system set up to handle payments for
international phone calls, where the recipient's network set the per minute
price. If its proposal is adopted, it would spell an end to the Internet's
long-standing, successful design based on unmetered "peered" traffic,
and effectively tax content providers to reach non-U.S. Internet users.

The sender-pays framework would likely prompt U.S.-based Internet services
to reject connections from users in developing countries, who would become
unaffordably expensive to communicate with, predicts Robert Pepper, Cisco's
vice president for global technology policy.

Developing countries "could effectively be cut off from the
Internet," says Pepper, a former policy chief at the U.S. Federal
Communications Commission. The ETNO plan, he says, "could have a host of
very negative unintended consequences."

It's not clear how much the taxes levied by the ETNO's plan would total per
year, but observers expect them to be in the billions of dollars. Government
data show that in 1996, U.S. phone companies paid
their overseas counterparts a total of $5.4 billion just for international long
distance calls.

If the new taxes were levied, larger U.S. companies might be able to reduce
the amount of money they pay by moving data closer to overseas customers,
something that Netflix, for instance, already does through Akamai and other
content delivery networks. But smaller U.S. companies unable to afford servers
in other nations would still have to pay.

The leaked documents were posted by the Web site WCITLeaks,
which was created by two policy analysts at the free-market Mercatus Center at
George Mason University in Arlington, Va, who stress their Wikileaks-esque
project is being done in their spare time. The name, WCITLeaks, is a reference
to the ITU's December summit in Dubai, the World Conference on International Telecommunications, or WCIT.

Eli Dourado, a research
fellow who founded WCITLeaks along with Jerry Brito,
told CNET this afternoon that the documents show that Internet taxes represent
"an attractive revenue stream for many governments, but it probably is not
in the interest of their people, since it would increase global
isolation."

Dourado hopes to continue posting internal ITU documents, and is asking for
more submissions. "We hope that shedding some light on them will help
people understand what's at stake," he says.

One vote per country
ETNO's proposal arrives against the backdrop of negotiations now beginning in
earnest to rewrite the International Telecommunications Regulations, a
multilateral treaty that governs international communications traffic. The
ITRs, which dates back to the days of the telegraph, were last revised in 1988,
long before the rise of the commercial Internet and the on-going migration of
voice, video and data traffic to the Internet's packet-switched network.

The U.S. delegation to the Dubai summit, which will be headed by Terry Kramer, currently an
entrepreneur-in-residence at the Harvard Business School, is certain to fight
proposals for new Internet taxes and others that could curb free speech or
privacy online.

But the ITU has 193 member countries,
and all have one vote each.

If proposals harmful to global Internet users eventually appear in a
revision to the ITRs, it's possible that the U.S. would refuse to ratify the
new treaty. But that would create additional problems: U.S. network operators
and their customers would still be held to new rules when dealing with foreign
partners and governments. The unintended result could be a Balkanization of the
Internet.

In response to the recent criticism from from Washington, ITU
Secretary-General Hamadoun Toure convened a meeting yesterday with ITU staff to
deny charges that the WCIT summit in Dubai "is all about ITU, or the
United Nations, trying to take over the Internet."

"The real issue on the table here is not at all about who 'runs' the
Internet -- and there are in fact no proposals on the table concerning
this," Toure said, according to a copy of his
remarks posted by the ITU. "The issue instead is on how best to
cooperate to ensure the free flow of information, the continued development of
broadband, continued investment, and continuing innovation."

ITU spokesman Paul Conneally told CNET this week that:

There are proposals that could change the charging system, but nothing
about pay-per-click as such. There isn't anything we can comment about this
interpretation because, as stated before, member states are free to interpret
proposals as they like, so if McDowell chooses to interpret as pay-per-click,
that is his right and similarly it is he who should provide pointers for you.

From the beginning, the Internet's architecture has been based on traffic
exchange between backbone providers for mutual benefit, without metering and
per-byte "settlement" charges for incoming and outgoing traffic.
ETNO's proposal would require network operators and others to instead negotiate
agreements "where appropriate" aimed at achieving "a sustainable
system of fair compensation for telecommunications services" based on
"the principle of sending party network pays."

"Not all those countries like open, transparent process"

This isn't the first time that a U.N. agency will consider the idea of
Internet taxes.

In 1999, a report from the United Nations Development Program proposed
Internet e-mail taxes to help developing nations, suggesting that an
appropriate amount would be the equivalent of one penny on every 100 e-mails
that an individual might send. But the agency backed
away from the idea a few days later.

And in 2010, the U.N.'s World Health Organization contemplated, but did not agree on, a "bit
tax" on Internet traffic.

Under the ITU system for international long distance, government-owned
telecommunications companies used to make billions from incoming calls, effectively
taxing the citizens of countries that placed the calls. That meant that
immigrants to developed nations paid princely sums to call their relatives back
home, as high as $1 a minute.

But technological advances have eroded the ability of the receiving
countries to collect the fees, and the historic shift to voice over Internet
Protocol services such as Skype has all but erased the transfer payments. Some
countries see the WCIT process as a long-shot opportunity to reclaim those
riches.